- Tax-the-rich plans of Democrats may boost muni-bond market
- Tax-exempt debt saw outsize gains early under Clinton, Obama
Elizabeth Warren wants to tax those she calls ultra-millionaires. Bernie Sanders has targeted the top 0.1%. And Joe Biden is seeking to reverse President Donald Trump’s tax cuts.
On the whole, Wall Street may not be very excited about the tax-the-rich push that’s front and center in the Democrats’ efforts to unseat Trump next year. But a $3.8 trillion corner of the bond market could reap big gains if one of them wins the White House.
That’s because the value of tax-exempt state and local government debt tends to rise when taxes head higher as wealthy investors buy those bonds to hold down what they owe.
Bloomberg Markets
By Amanda Albright
October 31, 2019, 6:30 AM PDT